After a clear understanding of project success and how it is measured in this study, chapter 4.3 focuses on the project management, which enables a successful project. The project resources, including budget, people and other resources, need to be managed. In the B2B £- marketplace introduction project team members come from different organizations as the procurement department, IT department, production or R&D (van Weele 2000, p. 229). The cross-functional project team has to be able to provide the appropriate qualifications. Together the team members can cover all technical and social questions related to the new procurement environment. Each organization within the firm has its own interests, agenda and management contributing to the joint workload. Although new support tools do exist, there are fewer constants, more challenges, reduced resources and increased risk (Lientz & Rea 2001).
The first area of importance concerning successful project management of B2B £- marketplace introduction projects is the top management support. Top management refers here to upper management being able to take overall decisions. The top management is responsible for the overall guidance and to set project rules (Lechler 1997, P- 96).
Furthermore, the top management is responsible for more specific project related issues.
Priority setting between different project tasks, definition of the project leader and the project team, fine-tuning of project objectives, definition of budget and time constraints are also responsibilities of the top management. In case of high-level problems and conflicts, the top management has to solve those. The appropriate conflict management for achieving resolutions is key for the project to keep on time and within the defined budget. Major project decisions, such as additional resources or additional time, have to be taken by top
management. Additionally, the top management has to inform all relevant departments within the finn about the ongoing project, the importance and the status. They are responsible for the satisfaction of all parties involved in the project by managing the strategic aspects of the project.
In this study the second important area of successful project management is the team competence, which consists of different aspects: project leader qualification, project team qualifications and project communication.
The project leader is responsible for managerial items but also for administrative items (Rinza 1985, p. 133, Schmelzer 1986, p. 69, Litke 1995, p. 174, Maddaus 2000, p. 88). First he has to manage and direct project resources to achieve the project objectives. Secondly, he has to supervise the project work. Furthermore he has to develop the project plan and ensure that the work is completed on time, within budget and with satisfying quality. The project leader has to anticipate and plan ahead, since anything unforeseen can reflect poorly on the project leader, even if it is not his fault (Maddaus 2000, p. 89). Another responsibility is the interface with upper management regarding project review, approval and addressing project issues.
Highly important is the motivation aspect; the project leader has to motivate the team in the presence of normal pressures of work as well as political realities and pressures. Conflict management is often required to solve intra-team conflicts, but also conflicts with other organizations or suppliers (Corsten 2000, p. 56). A project manager must be able to act as a problem and conflict solver. He needs to be able to identify and understand problems, put them into perspective and then develop and implement solutions (Lock 1996, p. 44); The project leader needs to select the right approach depending on the type of conflict. Forcing an individual to accept the others opinion might create an apparent removal of any conflict, but brings feelings of resentment and causes deterioration in the relationship between the persons in conflict. Solving the conflict by withdrawing from the conflict issues is also not appropriate as such an approach does not eliminate the conflict. The emphasis on smoothing is to focus on similarities rather than on differences over issues. This approach may not address the real issues; the differences remain under the surface. Bargaining and searching for a solution is a compromise, which is often achieved at the expense of optimum results. The confrontation approach involves a rational problem-solving approach, where disputing parties solve their differences by first focusing on the issues, then looking at alternative approaches and finally
66 4 The B2B E-marketplace introduction project
selecting the best alternative. 11 Effective conflict management is essential to assure the team motivation. Finally, the team leader is responsible for the appropriate qualifications of his team, he has to train members of the project team in project management methods and tools, in which they are involved. To be able to achieve the expectations, the project leader needs to be backed by the required power (Zogg 1974, p. 260, Lechler 1997, p. 98, Baguley 1999, p.
138). Therefore, he needs the formal authority to make decisions and decide issues. This may have to be used occasionally, but it can easily be abused. Then he needs to rely on reward and penalty power, so that he is able to reward or punish team members. Furthermore, the project leader requires the power as a technical authority. Otherwise the team members would not accept him as an expert and would not respect his judgment and maturity (Sotiriou & Wittmer 2001, p. 12). Through the experience and behavior of the project leader, the project leader installs a sense of respect among the project team. This is probably the best type of power.
Power should be invoked as little as possible in a formal way. Instead the project leader should develop and apply skills of collaboration, which appeals to the self-interest of the team members (Lientz & Rea 2001, p. 108). A project leader should have the following qualities to be able to develop respect among team members and management as a source of power: A project manager needs to communicate well verbally and in writing within and outside of the project. Communication problems have been identified as a major source of project failure (Lientz & Rea 2001, p. 111). The project leader has to be able to see the big picture and then relate it to the current project situation. Furthermore, the project leader has to be able to effectively manage people. He has to be able to take his experience, integrate it and then apply it to the current project. Based on the appropriate level of ambition and energy the project leader must work hard and be able to take measured risk (Sotiriou & Wittmer 2001, p.12). It is highly important that the project leader is able to step back from the project and take the overall view, otherwise symptoms of problems may be overlooked. A project leader should be able to show initiative and be willing to take risk (Neef 2001, p. 195). Due to their dual role of project manager and project administrator, they have to be organized. This includes managing time and being able to allocate time and energy to issues that are important (Corsten 2000, p.S3). A good project manager has to be able to admit that there is a problem and accept responsibility as well as to be able to accept suggestions, hints, and criticism and tum it into positive action. It is highly important for strategic decisions, that the project leader
11 For a more detailed review of different approaches of conflict management refer to Singh & Vlatas (1991), Al-Tabtabai et al. (2001).
is familiar with the organization, how it works and who the key players are. The project leader has to be prepared concerning all new E-procurement tools and possibilities. Otherwise he will lack credibility within the team. All these skills are interdependent. Experience and knowledge facilitate problem solving, as managing people and communicating go hand in hand.12
The project team is responsible for producing the project output, although the determination of the project purpose is beyond their responsibility (Baccarini 1999, p. 28). Based on the team work, complex and innovative tasks can be efficiently realized (Schmelzer 1992, p. 298, Lechler 1997, p. 101). Basis for solid project work is the appropriate know-how, experience and the relevant technical skills of the project team (Skulmoski 2001, p. 13). High motivation of the project team is key for the successful achievement of the project objectives. Only supported by high motivation, the project team can overcome many challenges related to individual differences and unexpected circumstances (Dunn 2001, p. 4). The project team must be well trained on specific issues concerning new technologies (Rothman 2000, p. 39), since the team members must be able to identify all critical issues beforehand during the execution of the project. When the project is finished, they need to be able to hand-over the new procedures and concepts to the operational workforce, who is working in the E- procurement environment. A poor hand-over is a major reason for a project failure.
Clarity concerning the individual tasks between the various team members enables a smoother project execution. In case of questions the appropriate responsibility can be easily identified.
The third aspect of team competence is the project communication. Effective communication has to be planned in two ways: internally within the project team and externally to all relevant organizations and even to the suppliers. Different types of information are available and can be used in the appropriate circumstances, oral communication especially useful for team internal use and written information for external communication (Maddaus 2000, p. 304). The information and communication plan has to be adapted to the project organization with different people at different locations. Different mediums have different advantages; for example the advantage of verbal communications in the sense that you can convey tone and yet not be pinned down to a specific text (Lientz & Rea 2001, p. 281).
The last area of importance of project management is the planning and steering aspect. All projects are built around standard business objectives for success: achieving high
12 For a detailed discussion on the attributes of a successful project manager refer to Lientz & Rea (200 I, p.
Ill).
68 4 The B2B E-marketplace introduction project
productivity, improving quality, delivering at the appropriate time, utilizing resources effectively and efficiently and managing costs (Stewart 2001, p. 41). The goal of every project is to do more, better, faster and with less. In order to be able to achieve this goal, project leaders need to be able to measure, what they are doing and how well they are achieving their goals against an initial benchmark or baseline. Therefore various activities have to be considered (Lientz & Rea 2001, p. 167). The status of the work on the project has to be determined on a regular basis, e.g. once a week. A standard format should be used covering the status on active tasks, additions and changes to the schedule, identification and discussion of any issues and the projected schedule for the next reporting period. Based on this information, the status of the project has to be analyzed. In case of any delay, appropriate actions can be taken to compensate the delay. Either the project objectives can be adapted or additional resources can be staffed on the project or time lines can be extended (Rinza 1985, p. 23). A continuous comparison between targets and actual status is key for an early recognition of any delay. The quality has to be assessed, so that poor quality can be directly adapted. The quality assessment has to be done on a detailed level to be able to identify weaknesses in quality, content, completeness and other attributes. Motivating and encouraging the team is an ongoing process to keep the team up to speed with the required quality level. Upcoming issues and opportunities have to be addressed. On a regular basis the management needs to be informed about the project status and occurring problems. Many project failures are caused by poor planning and controlling (Rothman 2000, p. 40). As Stewart (2001) recommends in order to better manage the ongoing project and to provide an organization-wide response to increasing pressures for excellence in project management, a balanced scorecard approach can be used to perform health checks throughout the project life cycle. Another possibility is the usage of computer packages for deterministic project management such as CPM (critical path method) (Dey & Ogunlana 2001), although their appropriate usage requires time-intense adaptations in the software to define the corresponding project set-up. Furthermore, during the ongoing project various indicators have to be continuously adapted (Kueng 1997, p. 50). However, before investing in any project management software, various criteria as the existent features of the software packages, the market presence of the producer, experience of reference customers and training offering should be evaluated (Martin 1997, p. 49).
Summarizing the aspects of project management, which are important in this study, for a successful project management of B2B £-marketplace introduction projects the above discussed three components need to be optimized: top management support, team competence and project planning and steering.
Project management
I I I
Top manasemenr Projccl planning
suppon Team competenCe ""' Sl<ering
Fi&tJre 4. 7 Definition of project management
70 5 Theoretical framework and hypotheses of the study
5 Theoretical framework and hypotheses of the study
B2B E-marketplaces offer tools and processes, such as business rules, technology, transaction support, that help companies conduct business with other entities more effectively. What separates this new marketplace from the old can be summed up in two words: efficiency and change (Cunningham 2001, p. 9). However, these new processes and tools must also comply with existing standards of doing business and the technology must support rather than impair those standards. The key to success is the appropriate fit between the given circumstances and the new methods of doing business. Not every B2B E-marketplace concept fits to every purchase situation. The purchase situation determines, which kind of relationship support is required. This has to be taken into account, when defining B2B E-marketplace concepts.
Furthermore, the cornerstone of the appropriate fit is a successful project management of the introduction of the B2B E-marketplace concept.
In the following chapter the theoretical framework is derived. The main research questions analyze the relation between the purchase situation and the characteristics of the B2B E- marketplace. Can a fit between the purchase situation and the B2B E-marketplace be defined from a relationship perspective? Since the relationship perspective is in center of analysis, the influence of the interplay between purchase situation and B2B E-marketplace characteristics on the success of a supplier relationship is analyzed. For reducing complexity, the theoretical framework is divided into three models. In the first model the impact of the appropriate fit between purchase situation and B2B E-marketplace characteristics on the direct and indirect value functions of a supplier relationship is discussed (chapter 5.1). With the second model the effects of successful project organization concerning the introduction of B2B E- marketplace concept is further detailed (chapter 5.2). In chapter 5.3 the third model is introduced covering the impact of a successful project organization on the fit between the purchase situation and the B2B E-marketplace. Chapter 5.4 provides a summary of the derived hypotheses and gives an overview of the theoretical framework of the study.
S.l Modell: Fit between purchase situation and 828 E-marketplace
Before discussing the impact of the appropriate fit between purchase situation and B2B E- marketplace on the relationship success the author wants to define the term "relationship success" as it is understood in this work.
Relationships have always mattered in business markets "when the interaction between a customer and a supplier has economic consequences that go beyond the simple transfer of products for money in a single transaction. [ ... ] Relationships matter when the value to the parties involved in an exchange stems from interaction in its entirety, rather than simply from the tangible resource transfer between the companies involved" (Ford et al. 1999, p. 66).
Relationships in traditional marketplaces developed organically as the key individuals in each firm built close personal or business friendships. Due to their mutual trust firms made specialized non-retrievable investments that created structural bonds, which hold the relationship together (Williamson 1975, 1979, Wilson & Jantrania 1996). Nowadays, the purpose of the development of relationships is to achieve strategic goals. A synergistic combination of individual and mutual goals encourages suppliers and buyers to invest time, effort and resources to create a long-term collaborative effort and thereby achieve individual and partnership strategic advantages (Wilson & Jantrania 1996, p. 56). Along with Walter et al. (2001) different value functions can be utilized in a partnership between a supplier and buyer. In order to be able to create value through these supplier relationships, it is highly important for the buyer to understand the functions of relationships properly. In the context of this study, value is understood as "the perceived trade-off between multiple benefits and sacrifices" gained through a supplier relationship by key decision makers in the buyer's organization (Walter et al. 2001, p. 369). The success of a relationship can be determined by summarizing the output of these various value functions. Only with an optimized utilization of the diverse value functions the buyer creates high relationship success. Some researchers define only monetary value functions (Anderson et al. 1993), whereas others also include non- monetary benefits, such as competence, market position and social rewards (Zeithaml 1988, Wilson 1995, Wilson & Jantrania 1996, Johnson et al. 1999).13 In this study, relationship success is measured by two components: direct and indirect value functions (Walter et al.
2001). While the direct value functions characterize the monetary outcome in cost savings, the
13 For a literature overview on value definitions refer to Woodruff (1997, p.141).
72 5 Theoretical framework and hypotheses of the study
indirect value functions summarize the non-monetary benefits. 14 The latter comprise innovation functions, which express the potential of innovation development due to the supplier relationship, and the access and market functions, which cover the supplier's competence of being able to help in getting better access to "official authorities as chambers, banks or trade associations" (Walter et al. 2001, p. 373). The author has translated the seller's perspective into a buyer's perspective with special reference to E-markets. The conceptualization of relationship success can be seen as following figure:
Relationship success
Figure S.t Relationship success
After getting clarity on the definition of relationship success the author wants to focus on the different reasons, which lead to the assumption, that the appropriate fit between purchase situation and B2B E-marketplace has a direct positive impact on the relationship success.
The following figure gives an overview of the first derived model:
Pla Plb
Figure 5.2 Modell: Fit between purchase siruation and B2B E-marketplace
The two propositions Ia and lb are based on the following considerations:
'" The other dimensions of direct value functions as defined by Walter et al. (2001), i.e. volume function and safeguard function. have not been incorporated in this study. The reason is that the volume function can be expressed by cost savings and the safeguard function is not relevant in the content of the B2B Eãmarketplace introduction project.
(1) The existing purchase situation has to be appropriately understood and interpreted.
(2) The B2B E-marketplace concept should not be a limitation to the potential success factors of the corresponding purchase situation.
(3) Limitations in direct or indirect value generation should be accepted.
(4) The real potential of indirect and direct value generation of the existing purchase situation has to be appropriately identified.
Adl: The purchase situation is the basis for supplier relationship development. The indirect and direct value generation of such relationship will be determined by the ability of the firms involved to exploit the given purchase situation in a relational sense and to adapt the B2B E-marketplace concept to these requirements.
The purchase situation as detailed in chapter 2 describes a specific position with respect to its current position, the projected future and the future desired positions in various dimensions, such as product, market, supplier and relationship characteristics. Based on this position, the buyer has to develop the appropriate strategy to utilize the direct and indirect value functions for optimizing the relationship success. The purchase situation predefines the areas of high and low potential. For example, in markets with only a limited number of suppliers the dependency of the buyer on the supplier is extremely high, which leads to only limited potential of the cost savings function, whereas the innovation function could deliver comparatively high value. On the other hand an extremely high purchase volume supports the volume and cost savings function. Based on these circumstances the B2B E-marketplace concept has to be adapted, otherwise the requirements cannot be fulfilled.
Ad2: Only if the purchase situation is matched by the B2B E-marketplace concept relationships can exist and prosper, because the B2B E-marketplace concept fosters interaction between partners.
The intensity of the required relationship support can be determined by the purchase situation.
The higher the buyer business impact (refer to chapter 2) the more relationship support is needed. Similar to Dubinsky and Ingram (1984, p. 34), who rate customers depending on their \
profit contribution, which is decisive for the customer relationship, the supplier relationship